Middle East and North Africa Concentrating Solar Power Knowledge and Innovation Program

A word with Luis Crespo, President of ESTELA

What does your institution currently do in the field of CSP? What is planned for the next three years?

ESTELA’s main goal is to present the value proposition of CSP plants not only in the Euro-Mediterranean countries but in the sunbelt countries as well. ESTELA is lobbying in the EU institutions to enhance their commitment with this technology for internal use as well as for cooperation with third countries.

ESTELA is currently promoting first-of-a-kind projects to produce solar thermal electricity in Southern European countries to be consumed in Central and Northern European countries under the Cooperation Mechanism schemes, which are stablished in the RES Directive.

With the current low costs of wind and solar, what is the added value that CSP brings to countries in the MENA region? What are the merits of CSP over gas-fired (or other conventional) power?

Countries in the MENA region are increasing their electricity demand very quickly. They will probably double the demand at the evening peak in 10 years and there are basically two ways to make it: either with a double investment in PV or wind plus combined cycles; or by investment in CSP plants.

Therefore, smart planning does not compare the generation costs but the value to the system. In this regard CSP is today – and it will continue to be in the future – the best choice for planners. Morocco is a very good example of this rationale, as they consider in their solar program a big share of dispatchable CSP plants.

Regarding the comparison of CSP with fossil fired plants, they share similar features in terms of grid stability as the inertia of the generation equipment is almost the same but fossil fired plants produce large amounts of CO2, which could make these plants not bankable in a near future. Besides of this generation costs for CSP plants are perfectly know upfront while they are very uncertain for gas fired plants in terms of fuel.

What are the three top challenges for CSP deployment in the MENA region and how can they be overcome?

The first one is the understanding by policy makers of the differences between value and cost. The new capacity in their respective systems must be planned according to the value that any new plant will provide to the whole system.

The second is certainly the financing. The clean energy funds agreed in the COP 21 in Paris and the indications from COP 22 in Marrakech should be key to overcome this barrier.

The third is capacity building in these countries. This process will come naturally, as soon as some CSP plants start to be deployed in these countries.

What are the three main opportunities for CSP in the MENA region and how can they be maximized?

The main one is the need for dispatchable power, as electricity demand is growing so fast due to GDP growth, demography and increasing electrification of final uses.

Then the macroeconomic impact that CSP plants will bring to the countries will be soon considered by policy makers as a clear lever for supporting the renewable generation technology which provides not only the greatest value to the system but the largest return to their countries’ economies due to the high local content of the CSP plants.

To maximize both, the role of the CSP in the generation mix and the macroeconomic return on investments a clear deployment program must be planned. Then, joint ventures, technology transfer, capacity building, etc., will appear as the way to proceed in clear win-win approaches.

How significant is the non-electricity CSP opportunity in MENA and how can it be unleashed?

Medium temperature process heat represents a significant final consumption share at the global level and concentrated solar systems have an important role to play in the future. Mirror fields can provide high saving levels in many industrial and service sectors in MENA countries. Solar desalination, enhanced oil recovery or district cooling might be – in addition to other industrial sectors – applications, which can start in MENA countries at a large scale.

Solar process heat applications – in general – are still not developed enough as solar thermal electricity, but MENA countries have excellent conditions to start deploying this kind of applications at much lower cost than in Europe. Cost analysis will show that they are almost competitive against gas systems.

What are the main steps MENA countries should follow if they would like to develop CSP projects in their countries?

Policy makers should be convinced of the benefits of approaching the planning of the new capacity with a “value” perspective on how best satisfying the increasing demand needs, along with a macroeconomic analysis regarding the impacts in their respective countries’ economies of a CSP program.

They will soon realize that the apparent gap in terms of cost – there will be no gap in terms of value – will be much lower than the financial benefit for their countries.

The Middle East and North Africa Concentrating Solar Power Knowledge and Innovation Program aims to accelerate CSP investments in the region by addressing knowledge and awareness gaps, linking projects with sources of finance and technical advice, and promoting innovation. This three-year program was launched in late 2016 by the World Bank with support from the Climate Investment Funds (CIF).

The Center for Mediterranean Integration (CMI) is a multi-partner platform where development agencies, Governments, local authorities and civil society from around the Mediterranean convene in order to exchange knowledge, discuss public policies, and identify the solutions needed to address key challenges facing the Mediterranean region.

About CIF

Since 2008, the Climate Investment Funds (CIF) has built a portfolio of over 300 investments in 72 developing and middle-income countries to scale up renewable energy and clean technologies, mainstream climate resilience in development plans and action, and support the sustainable management of forests. Although most programs and projects are still in the early stages of implementation, our funding has already contributed to over 3 gigawatts of new renewable energy capacity and close to 3 million people are already benefiting from CIF-supported climate resilience measures. Our experience shows that with strong leadership, the right technical and financial support, and inclusive partnerships, difficult investment decisions can be made with tangible results.